The average Bay Area home sold in April went for 7.1 percent more than the askin…

The average Bay Area home sold in April went for 7.1 percent more than the asking price, the largest percentage since the California Association of Realtors started keeping track in January 2008. […] it’s not putting a crimp in runaway home prices. All-cash buyers, who represent about a quarter of the overall Bay Area market, don’t need an appraisal because they are not getting a loan. After losing out on many homes, some frustrated buyers will pay whatever it takes, often with no loan, appraisal or inspection contingencies. If you start at full retail price, nobody makes an offer. Lenders want to see at least three comparable homes that have sold in the past six or 12 months, but they also like to see current listings in the neighborhood. When homes are deliberately underpriced, Larsson might add a note to the appraisal that says, “No listings are provided because the agents’ strategy in the local market is to list under what they expect multiple offers to generate.” Zach Dawson, Fannie Mae’s director of collateral strategy, has seen appraisers in this situation provide current listings, but adjust them by the average sales-to-list price ratios in the neighborhood. When she starts an appraisal, Larsson said, she often gets “sticker shock” when she sees the contract price. In California’s coastal markets, “We are seeing a higher frequency of appraisals come in below the sales price,” said Drew Collins, division sales manager for Wells Fargo. Diane Crosby, an executive loan adviser with RPM Mortgage, had an appraisal come in last week at $460,000 on a home that her client had offered to buy for $481,000. Anticipating that might happen, the Realtor had negotiated an appraisal contingency that would let the buyer cancel if the appraised value came in at less than $20,000 below the offer price. The seller reduced the price by 5 percent and “my clients made up the difference with a larger down payment and had to take an inferior loan,” she said. Berg said the appraiser blamed the shortfall partly on a new software program Fannie Mae began sharing with lenders on Jan. 26 called Collateral Underwriter. The program assigns a risk score from 1 to 5 on all appraisals, and highlights “specific aspects of the appraisal that may warrant further attention by the lenders,” Dawson said. […] “our licensing agreement prohibits (lenders from) using (the program’s) findings as the sole basis for a decision.”